Retired cashing in £10m a day from homes to boost pensions

PENSIONER homeowners are cashing in housing wealth at a rate of almost £10million a day. For the past six months, retired owners have released £9.5million worth of equity in their home every day – a total of £1.71billion.

They are taking out an average of £78,000 to boost their pensions, according to data from equity release adviser Key Retirement.

But their families are also cashing in as generous parents and grandparents hand over large sums of money to the younger generations.

About 28 per cent of retired homeowners used some or all of the money for gifts for families, compared with 23 per cent in the first six months of 2017.

The most popular use of the money released in the six months was to fund home and garden improvements, with 63 per cent spending some of the money on their houses while a third used the cash to pay for holidays.

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Debt remains an issue – about one in five cleared outstanding mortgages during the six months and 32 per cent paid off credit cards or loans. The equity release market is booming as pensioners cash in on a soaring market.

Dean Mirfin, of Key Retirement, said: “Customer demand is driving the expansion in the market to new record highs enabling more retired homeowners to transform their finances.

“More money was released in the first six months of 2018 than in the whole of 2015 as records continue to be broken across the market with expert independent advisers playing a vital role.

“Property wealth is not just helping to transform an individual’s retirement planning but is also helping their families with their financial needs. The growth in gifting underlines how much can be achieved when the average amounts being released are as much as £78,000.

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Steve Wilkie, the managing director of Responsible Equity Release, said: “Equity release is increasingly being used as a pension income booster as many hit retirement age and realise they haven’t saved enough.

“It’s a problem that has to be addressed by educating people about pension savings.

“There seems to be a chasm between how much people think they need for a comfortable retirement and how much they actually need.”